Price-gouging cases bring few lawsuits

TALLAHASSEE - As Floridians struggled to recover from eight hurricanes over the past two years, they faced a new threat from merchants making a fast buck.

Prices of gasoline, hotel rooms and even bottled water shot up, prompting consumers to flood the state with more than 13,000 complaints of price gouging.

They called a toll-free number activated by Attorney General Charlie Crist, who promised to bring the scam artists to justice.

But Crist's office found that fewer than one of every 100 complaints warranted a full investigation. Crist's army of attorneys launched formal investigations in 81 cases.

Crist, who has made his aggressive stand against price gouging an important part of his profile as he runs for governor, reported collecting $1.36-million in restitution from companies accused of cheating consumers during two record-breaking hurricane seasons. The total includes cash paid to victims and what Crist's office calls debt reduction, cases in which state action resulted in reduced charges for services.

"It doesn't sound like very much money," said Bill Newton, a Tampa consumer advocate. "But it's hard to tell ... they're the only ones out there really going after this stuff."

Newton, executive director of the Florida Consumer Action Network, said Crist's office plays an important role in discouraging businesses from ripping off the public.

"Businesses have to know that there will be penalties if they're caught price gouging," Newton said. "There has to be some fear of getting caught."

Figures provided by Crist's office show the number of price-gouging complaints dropped after Hurricane Charley, the first major storm, and that the total complaints in 2005 were about half of the 2004 total. The office cites that as evidence that his initial attack against price gougers served as a deterrent.

Crist said he's not surprised that most complaints were unwarranted, because emotions run high right after a hurricane. "We have to apply the law to the facts," he said.

Crist spokeswoman JoAnn Carrin said many complaints were resolved quickly after intervention by an investigator.

In August 2004, as Charley's eye churned ominously toward the southwest coast, Florida already had a special toll-free number for complaints in the office of Agriculture Commissioner Charles Bronson. Chief Financial Officer Tom Gallagher also had a help line for complaints about insurers or adjusters.

Most of the 13,000 complaints to Crist's hotline were settled without lawsuits, which is how Crist wants it. Businesses were allowed to settle without admitting wrongdoing.

"Good lawyers try to settle. ... There's a risk-benefit ratio that you have to undertake with every decision like that," Crist said.

Of the 81 cases, 17 resulted in lawsuits. Fourteen of them were resolved with the businesses paying a total of $350,000. Some businesses agreed to pay restitution or donate money to a relief fund for hurricane victims to avoid the stigma of being fined by the state.

Crist's economic crimes unit collected $70,000 from a Days Inn in West Palm Beach, $40,000 from a Payless Inn & Suites in Ocala and $40,000 from a Baymont Inn in Naples. The agency also collected $25,489 in restitution from Island Food Stores of Jacksonville.

An Island Food Stores gas station near an exit ramp off Interstate 10 in Tallahassee was accused of raising prices by 72 cents a gallon after Hurricane Katrina.

As part of the settlement, customers got $10 checks in the mail.

One recipient, Mark Newman, a bank technology officer, said the refund was a pleasant surprise.

"The office took my call and they took some action, and I got a refund," Newman said. "That's a lot better than a lot of my other experiences with government."

Three other price-gouging lawsuits remain unresolved.

A suburban Orlando tree removal company, Sun State Trees & Property Maintenance, is battling Crist in court. Gouging "simply did not occur," said company attorney Richard Whitaker of Orlando.

Whitaker said he is a Republican but is not involved in politics and has no animosity toward Crist for suing his client.